The NAR Housing Affordability Index Reaches a 42-year High for January 2012

It shouldn't take a particularly observant eye to see the historic affordability available to home buyers, thanks to current home prices and mortgage rates. The National Association of Realtors (NAR) Housing Affordability Index reached a 42-year high in January. An index of 100 represents a median-income family's ability to afford a median-priced, existing single-family home, with a 20% down payment and mortgage payments at 25% of gross income. January's record reading was 206.1!

Freddie Mac's chief economist commented, "the typical family had more than double the income needed to purchase a median-priced home in January." There's also talk about prices finally bottoming out. Data aggregator CoreLogic's National Home Price Index in January was at its lowest level since January 2003, and their chief economist noted prices are "not far from the bottom." Finally, the NAR forecasts existing home sales UP 6.8% for the year.